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Modern Importance of Quality

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Title: Modern Importance of Quality


1
Modern Importance of Quality
  • The first job we have is to turn out quality
    merchandise that consumers will buy and keep on
    buying. If we produce it efficiently and
    economically, we will earn a profit, in which you
    will share.
  • - William Cooper Procter

2
Definitions of Quality
  • Transcendent definition excellence
  • Product-based definition quantities of product
    attributes
  • User-based definition fitness for intended use
  • Value-based definition quality vs. price
  • Manufacturing-based definition conformance to
    specifications

3
Quality Perspectives
4
Customer-Driven Quality
  • Meeting or exceeding customer expectations
  • Customers can be...
  • Consumers
  • External customers
  • Internal customers

5
Total Quality
  • People-focused management system
  • Focus on increasing customer satisfaction and
    reducing costs
  • A systems approach that integrates organizational
    functions and the entire supply chain
  • Stresses learning and adaptation to change
  • Based on the scientific method

6
Principles of Total Quality
  • Customer and stakeholder focus
  • Participation and teamwork
  • Process focus and continuous improvement

...supported by an integrated organizational
infrastructure, a set of management
practices, and a set of tools and techniques
7
Customer and Stakeholder Focus
  • Customer is principal judge of quality
  • Organizations must first understand customers
    needs and expectations in order to meet and
    exceed them
  • Organizations must build relationships with
    customers
  • Customers include employees and society at large

8
Participation and Teamwork
  • Employees know their jobs best and therefore, how
    to improve them
  • Management must develop the systems and
    procedures that foster participation and teamwork
  • Empowerment better serves customers, and creates
    trust and motivation
  • Teamwork and partnerships must exist both
    horizontally and vertically

9
Process Focus and Continuous Improvement
  • A process is a sequence of activities that is
    intended to achieve some result

10
Competitive Advantage
  • Is driven by customer wants and needs
  • Makes significant contribution to business
    success
  • Matches organizations unique resources with
    opportunities
  • Is durable and lasting
  • Provides basis for further improvement
  • Provides direction and motivation

Quality supports each of these characteristics
11
Quality and Profitability
Improved quality of design
Improved quality of conformance
Higher perceived value
Higher prices
Lower manufacturing and service costs
Increased market share
Increased revenues
Higher profitability
12
Evidence that Quality Impacts Business Results
  • General Accounting Office study of Baldrige Award
    applicants
  • Baldrige stock study (see www.quality.nist.gov)
  • Hendricks and Singhal study of quality award
    winners
  • Performance results of Baldrige Award winners

13
GAO TQ Model
14
Three Levels of Quality
  • Organizational level meeting external customer
    requirements
  • Process level linking external and internal
    customer requirements
  • Performer/job level meeting internal customer
    requirements

15
Quality and Personal Values
  • Personal initiative has a positive impact on
    business success
  • Quality begins with personal attitudes
  • Quality-focused individuals often exceed customer
    expectations
  • Attitudes can be changed through awareness and
    effort (e.g., personal quality checklists)

16
DefinitionTotal Quality Management
  • Total Quality Management (TQ, QM or TQM) and Six
    Sigma (6?) are sweeping culture change efforts
    to position a company for greater customer
    satisfaction, profitability and competitiveness.
  • TQ may be defined as managing the entire
    organization so that it excels on all dimensions
    of products and services that are important to
    the customer.
  • We often think of features when we think of the
    quality of a product or service TQ is about
    conformance quality, not features.

17
Another meaning of TQM
  • Total Quality Management means that the
    organization's culture is defined by and supports
    the constant attainment of customer satisfaction
    through an integrated system of tools,
    techniques, and training. This involves the
    continuous improvement of organizational
    processes, resulting in high quality products and
    services.

18
Whats the goal of TQM?
  • Do the right things right the first time, every
    time.

19
Another way to put it
  • At its simplest, TQM is all managers leading and
    facilitating all contributors in everyones two
    main objectives
  • (1) total client satisfaction through quality
    products and services and
  • (2) continuous improvements to processes,
    systems, people, suppliers, partners, products,
    and services.

20
Total Quality also is
  • Meeting Our Customers Requirements
  • Doing Things Right the First Time Freedom from
    Failure (Defects)
  • Consistency (Reduction in Variation)
  • Continuous Improvement
  • Quality in Everything We Do

21
A Quality Management System is
  • A belief in the employees ability to solve
    problems
  • A belief that people doing the work are best able
    to improve it
  • A belief that everyone is responsible for quality

22
Elements for Success
  • Management Support
  • Mission Statement
  • Proper Planning
  • Customer and Bottom Line Focus
  • Measurement
  • Empowerment
  • Teamwork/Effective Meetings
  • Continuous Process Improvement
  • Dedicated Resources

23
The Continuous Improvement Process
Measurement
Empowerment/ Shared Leadership
Customer Satisfaction
Measurement
Business Results
Measurement
Process Improvement/ Problem Solving
Team Management
. . .
Measurement
24
Modern History of Quality Management
  • Frederick W. Taylor wrote Principles of
    Scientific Management in 1911.
  • Walter A. Shewhart used statistics in quality
    control and inspection, and showed that
    productivity improves when variation is reduced
    (1924) wrote Economic Control of Manufactured
    Product in 1931.
  • W. Edwards Deming and Joseph M. Juran, students
    of Shewhart, went to Japan in 1950 began
    transformation from shoddy to world class
    goods.
  • In 1960, Dr. K. Ishikawa formalized quality
    circles - the use of small groups to eliminate
    variation and improve processes.
  • In the late 70s and early 80s
  • Deming returned from Japan to write Out of the
    Crisis,
  • and began his famous 4-day seminars in the
    United States
  • Phil Crosby wrote Quality is Free
  • NBC ran If Japan can do it, why cant we?
  • Motorola began 6 Sigma

25
History of Quality Management
  • Demings 14 Points
  • 1. Create constancy of purpose for improvement
  • 2. Adopt a new philosophy
  • 3. Cease dependence on mass inspection
  • 4. Do not award business on price alone
  • 5. Work continually on the system of production
    and service
  • 6. Institute modern methods of training
  • 7. Institute modern methods of supervision of
    workers
  • 8. Drive out fear
  • 9. Break down barriers between departments
  • 10. Eliminate slogans, exhortations, and targets
    for the work force
  • 11. Eliminate numerical quotas
  • 12. Remove barriers preventing pride of
    workmanship
  • 13. Institute a vigorous program of education and
    retraining
  • 14. Take action to accomplish the transformation

26
History of Quality Management
  • Demings Concept of Profound Knowledge
  • Understanding (and appreciation) of Systems
  • - optimizing sub-systems sub-optimizes the total
    system
  • - the majority of defects come from systems, the
    responsibility of
  • management (e.g., machines not in good
    order, defective material, etc.
  • Knowledge of Statistics (variation, capability,
    uncertainty in data, etc.)
  • - to identify where problems are, and point
    managers and workers
  • toward solutions
  • Knowledge of Psychology (Motivation)
  • - people are afraid of failing and not being
    recognized,
  • so they fear how data will be used against them
  • Theory of Knowledge
  • - understanding that management in any form is a
    prediction, and is
  • based on assumptions

27
History of Total Quality
  • According to Dr. Joseph M. Juran (1991)
  • On the assembly line at the Ford Motor Company
    in 1923, most of the workers producing Model Ts
    were immigrants and could not speak English.
    Many were also illiterate. Workers learned
    their trade by modeling the actions of other
    workers. They were unable to plan,
    problem-solve, and make decisions. As a result,
    the Taylor scientific school of management
    flourished, and MBAs and industrial engineers
    were invented to do this work. Today, however,
    the workforce is educated. Workers know what is
    needed to improve their jobs, and companies that
    do not tap into this significant source of
    knowledge will truly be at a competitive
    disadvantage.

28
History of Total Quality
According to Phil Crosby, Quality is . .
. An attitude - Zero Defects - Continuous
Improvement A measurement - Price of
Conformance, plus - Price of Nonconformance
(defects)
29
TQ Transforming an Organization
30
What is Six Sigma?
  • A goal of near perfection in meeting customer
    requirements
  • A sweeping culture change effort to position a
    company for greater customer satisfaction,
    profitability and competitiveness
  • A comprehensive and flexible system for
    achieving, sustaining and maximizing business
    success uniquely driven by close understanding
    of customer needs, disciplined use of facts,
    data, and statistical analysis, and diligent
    attention to managing, improving and reinventing
    business processes
  • (SourceThe Six Sigma Way by Pande, Neuman and
    Cavanagh)

31
Is 99 Quality Good Enough?
  • 22,000 checks will be deducted from the wrong
    bank accounts in the next 60 minutes.
  • 20,000 incorrect drug prescriptions will be
    written in the next 12 months.
  • 12 babies will be given to the wrong parents each
    day.

32
Six Sigma Quality
  • The objective of Six Sigma quality is 3.4
    defects per million opportunities!

33
But is Six Sigma Realistic?


IRS Tax Advice (phone-in)
(66810 ppm)


Restaurant Bills

Doctor Prescription Writing

Payroll Processing


Average Company
Order Write-up

Journal Vouchers
Wire Transfers
Air Line Baggage Handling

Defects Per Million Opportunities (DPMO)
Purchased Material Lot Reject Rate
(233 ppm)
Best in Class
Domestic Airline Flight Fatality Rate
(3.4 ppm)
(0.43 ppm)
SIGMA
34
Six Sigma Improvement MethodsDMAIC vs. DMADV
Define
Measure
Analyze
Continuous Improvement
Reengineering
Design
Improve
Validate
Control
35
Six Sigma DMAIC Process
Control
Define Define who your customers are, and what
their requirements are for your products and
services Their expectations. Define your team
goals, project boundaries, what you will focus on
and what you wont. Define the process you are
striving to improve by mapping the process.
Improve
Define
Analyze
Measure
36
Six Sigma DMAIC Process
Measure Eliminate guesswork and assumptions
about what customers need and expect and how well
processes are working. Collect data from many
sources to determine speed in responding to
customer requests, defect types and how
frequently they occur, client feedback on how
processes fit their needs, how clients rate us
over time, etc. The data collection may suggest
Charter revision.
Control
Improve
Define
Analyze
Measure
37
Six Sigma DMAIC Process
Analyze Grounded in the context of the customer
and competitive environment, analyze is used to
organize data and look for process problems and
opportunities. This step helps to identify gaps
between current and goal performance, prioritize
opportunities to improve, identify sources of
variation and root causes of problems in the
process.
Control
Improve
Define
Analyze
Measure
38
Six Sigma DMAIC Process
Control
Improve Generate both obvious and creative
solutions to fix and prevent problems. Finding
creative solutions by correcting root causes
requires innovation, technology and discipline.
Improve
Define
Analyze
Measure
39
Six Sigma DMAIC Process
Control Insure that the process improvements,
once implemented, will hold the gains rather
than revert to the same problems again. Various
control tools such as statistical process control
can be used. Other tools such as procedure
documentation helps institutionalize the
improvement.
Control
Improve
Define
Analyze
Measure
40
Six Sigma DMADV Process
Design Develop detailed design for new process.
Determine and evaluate enabling elements.
Create control and testing plan for new design.
Use tools such as simulation, benchmarking, DOE,
Quality Function Deployment (QFD), FMECA
analysis, and cost/benefit analysis.
Validate
Design
Define
Analyze
Measure
41
Six Sigma DMADV Process
Validate
Validate Test detailed design with a pilot
implementation. If successful, develop and
execute a full-scale implementation. Tools in
this step include planning tools,
flowcharts/other process management techniques,
and work documentation.
Design
Define
Analyze
Measure
42
History of Quality Assurance (1 of 2)
  • Skilled craftsmanship during Middle Ages
  • Industrial Revolution rise of inspection and
    separate quality departments
  • Statistical methods at Bell System
  • Quality control during World War II
  • Quality management in Japan

43
History of Quality Assurance (2 of 2)
  • Quality awareness in U.S. manufacturing industry
    during 1980s Total Quality Management
  • Malcolm Baldrige National Quality Award (1987)
  • Quality in service industries, government, health
    care, and education
  • Current and future challenge keep progress in
    quality management alive

44
Productivity and TQM
  • Traditional view
  • Quality cannot be improved without significant
    losses in productivity.
  • TQM view
  • Improved quality leads to improved productivity.

45
Basic Tenets of TQM
  • 1. The customer makes the ultimate determination
    of quality.
  • 2. Top management must provide leadership and
    support for all quality initiatives.
  • 3. Preventing variability is the key to
    producing high quality.
  • 4. Quality goals are a moving target, thereby
    requiring a commitment toward continuous
    improvement.
  • 5. Improving quality requires the establishment
    of effective metrics. We must speak with data and
    facts not just opinions.

46
The three aspects of TQM
Tools, techniques, and training in their use for
analyzing, understanding, and solving quality
problems
Counting Customers Culture
Quality for the customer as a driving force and
central concern.
Shared values and beliefs, expressed by leaders,
that define and support quality.
47
Quality Throughout
  • A Customers impression of quality begins with
    the initial contact with the company and
    continues through the life of the product.
  • Customers look to the total package - sales,
    service during the sale, packaging, deliver, and
    service after the sale.
  • Quality extends to how the receptionist answers
    the phone, how managers treat subordinates, how
    courteous sales and repair people are, and how
    the product is serviced after the sale.
  • All departments of the company must strive to
    improve the quality of their operations.

48
Value-based Approach
  • Manufacturing Dimensions
  • Performance
  • Features
  • Reliability
  • Conformance
  • Durability
  • Serviceability
  • Aesthetics
  • Perceived quality
  • Service Dimensions
  • Reliability
  • Responsiveness
  • Assurance
  • Empathy
  • Tangibles

49
The TQM System
Continuous Improvement
Objective
Customer Focus
Process Improvement
Total Involvement
Principles
Leadership Education and Training Supportive
structure Communications Reward and
recognition Measurement
Elements
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